81 FR 86041 - Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending NYSE MKT Rule 901NY
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 229 (November 29, 2016)
Federal Register Volume 81, Issue 229 (November 29, 2016)
| Page Range | 86041-86044 | |
| FR Document | 2016-28633 |
[Federal Register Volume 81, Number 229 (Tuesday, November 29, 2016)] [Notices] [Pages 86041-86044] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-28633] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-79374; File No. SR-NYSEMKT-2016-106] Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending NYSE MKT Rule 901NY November 22, 2016. Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 1934 (the ``Act''),\2\ and Rule 19b-4 thereunder,\3\ notice is hereby given that on November 10, 2016, NYSE MKT LLC (the ``Exchange'' or ``NYSE MKT'') filed with the Securities and Exchange Commission (the ``Commission'') the proposed rule change as described in Items I and II below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 15 U.S.C. 78a. \3\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend NYSE MKT Rule 901NY to permit the Chief Executive Officer of the Exchange or his or her designee to take certain actions in connection with the trading of securities on the NYSE Amex Options marketplace. The proposed rule change is available on the Exchange's Web site at www.nyse.com, at the principal office of the Exchange, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and the Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend NYSE Amex Options Rule 901NY (Trading Sessions) to permit the Chief Executive Officer (``CEO'') of the Exchange or his or her designee to take certain actions in connection with the trading of securities on the Exchange. The Exchange believes the proposed rule change would make Rule 901NY more reflective of the organizational structure of the Exchange. At the same time, the proposed rule changes would ensure that the Board of Directors of the Exchange continues to have the authority to take action it deems necessary or appropriate in particular situations. The first paragraph of Rule 901NY provides that, unless otherwise ruled by the Board of the Exchange or its designee, the Exchange shall be open for the transaction of business daily except on Saturdays and Sundays, and that the hours at which trading sessions shall open and close shall be established by the Board or its designee. Commentary .01 to Rule 901NY notes that, except under unusual conditions as may be determined by the Board or its designee, hours during which transactions in options on individual securities may be made on the Exchange shall correspond to the normal hours for business set forth in the rules of the primary exchange listing the securities underlying the options. The Exchange proposes to amend the first paragraph of Rule 901NY to provide that, except as may be otherwise determined by the Board as to particular days, the Exchange shall be open for the transaction of business on every business day. The Exchange proposes to remove the current exclusion of Saturdays and Sundays because Saturdays and Sundays are not business days and therefore no exclusion is needed. Finally, the amended paragraph would provide that the hours at which trading sessions shall open and close may be specified by Exchange rule, as well as by the Board. The two paragraphs of the present rule would become paragraphs (a) and (b). These proposed rule changes are based in part Exchange Rule 51(a)--Equities as well as on New York Stock Exchange LLC (``NYSE LLC'') Rule 51(a).\4\ --------------------------------------------------------------------------- \4\ See Securities Exchange Act Release No. 58705 (October 1, 2008), 73 FR 58995 (October 8, 2008) (SR-Amex-2008-63). NYSE LLC is an affiliate of the Exchange. See Securities Exchange Act Release No. 45433 (February 12, 2002), 67 FR 7441 (February 19, 2002) (SR- NYSE-2001-55). The Exchange notes that its affiliate NYSE Arca, Inc. is submitting substantially the same proposed rule change for NYSE Arca Rule 7.1 and NYSE Arca Equities Rule 7.1. See SR-NYSEArca-2016- 148. --------------------------------------------------------------------------- The Exchange proposes to add new paragraphs (c), (d), and (e) to Rule 901NY. These proposed changes are based on Rule 51(b)-(d)-- Equities and NYSE Rule 51(b) and (c). New paragraph (c) would provide that, except as may be otherwise determined by the Board of Directors, the CEO of the Exchange or his or her designee may halt or suspend trading in some or all securities traded on the Exchange; extend the hours for the transaction of business on the Exchange; close some or all Exchange facilities; determine the duration of any such halt, suspension or closing undertaken; or determine to trade securities on the Exchange's disaster recovery facility.\5\ --------------------------------------------------------------------------- \5\ As part of its business continuity and disaster recovery plans, the Exchange maintains a disaster recovery facility, which is a secondary data center located in a geographically diverse location, as required by Regulation SCI. See 14 CFR 242.1001(a)(2)(v) (requiring policies and procedures for business continutity [sic] and disaster recovery plans that include maintaining backup and recovery capabilities sufficiently resilient and geographically diverse and that are reasonably designed to achieve next business day resumption of trading and two-hour resumption of critical SCI systems following a wide-scale disruption). --------------------------------------------------------------------------- [[Page 86042]] New paragraph (d) would provide that the CEO or his or her designee shall take any of the actions described in new paragraph (c) only when he or she deems such action to be necessary or appropriate for the maintenance of a fair and orderly market, or the protection of investors or otherwise in the public interest, due to extraordinary circumstances such as:Actual or threatened physical danger, severe climatic conditions, civil unrest, terrorism, acts of war, or loss or interruption of facilities utilized by the Exchange, a request by a governmental agency or official, or a period of mourning or recognition for a person or event. New paragraph (e) would require that the CEO or his or her designee notify the Board of Directors of actions taken pursuant to the rule, except for a period of mourning or recognition for a person or event, as soon thereafter as is feasible.\6\ --------------------------------------------------------------------------- \6\ For example, the Exchange may close on a national day of mourning for a former president of the United States. --------------------------------------------------------------------------- The Exchange proposes that commentary .01 to Rule 901NY be amended by deleting ``under unusual conditions'' and a reference to the Board's designee, and by adding a reference to the authority of the CEO or his or her designee under new subparagraph (c). Finally, the Exchange proposes to change the name of Rule 901NY from ``Trading Sessions'' to ``Hours of Business,'' which would make it consistent with Rule 51--Equities. Currently, Rule 901NY requires Board action if extraordinary circumstances arise. However, the Board of Directors may not be able to convene and act quickly, thereby delaying any potential response. Pursuant to the operating agreement of the Exchange, a majority of the members of the Board of Directors must be Independent Directors.\7\ Therefore, as a practical matter, they are unlikely to be at or near the Exchange if extraordinary circumstances arise, making it harder to convene quickly. Further, if communication systems are severely compromised in an emergency, the Board of Directors may not be able to convene at all.\8\ --------------------------------------------------------------------------- \7\ See Tenth Amended and Restated Operating Agreement of NYSE MKT LLC, Article II, Sec. 2.03(a)(i). ``Independent Directors'' are directors that are U.S. persons that satisfy the independence requirements of the Exchange. Id. \8\ The presence of a majority of directors then in office is necessary to constitute a quorum. See Tenth Amended and Restated Operating Agreement of NYSE MKT LLC, Article II, Sec. 2.03(d). --------------------------------------------------------------------------- Current Rule 901NY partially addresses this concern by allowing the Board of Directors to name designees. However, use of a designee requires that the Board make the delegation before any unusual conditions arise. Further, Rule 901NY does not set any limits on when designees may act under the rule, unlike proposed paragraphs (c) and (d). Accordingly, the Exchange proposes to delete the references to a Board designee in the first paragraph of Rule 901NY and commentary .01. Such proposed deletions would make Rule 901NY consistent with Rule 51(a)--Equities, NYSE Rule 51(a) and NYSE Arca Equities Rule 7.1, none of which contemplate the board of directors appointing a designee to set the hours for business. The Exchange believes designating by rule that the CEO of the Exchange or his or her designee may take certain actions in extraordinary circumstances would make Rule 901NY more reflective of the organizational structure of the Exchange. As described above, the CEO or his or her designees would be able to take such action only when they deem it to be necessary or appropriate for the maintenance of a fair and orderly market, or the protection of investors or otherwise in the public interest, due to extraordinary circumstances. The proposed amendments would ensure that the Board of Directors continues to have the authority to take action it deems necessary or appropriate in particular situations. In addition, as proposed, the amended rule would ensure that the Board of Directors would remain informed, by requiring the CEO to notify the relevant Board of actions taken pursuant to the authority granted under the rule, with the exception of a period of mourning or recognition for a person or event, as soon thereafter as is feasible. The proposed changes would have the additional benefit of bringing Rule 901NY into greater conformity with Rule 51--Equities, as well as NYSE Rule 51.\9\ --------------------------------------------------------------------------- \9\ Rule 51(a)--Equities and NYSE Rule 51(a) do not state that the CEO can name a designee. However, pursuant to Rule 1--Equities and NYSE Rule 1, the CEO of the relevant exchange may designate one or more qualified employees to act in his or her place in the event that the CEO is not available. See Rule 1--Equities and NYSE Rule 1. See also Securities Exchange Act Release No. 61810 (March 31, 2010), 75 FR 17816 (April 7, 2010) (SR-NYSE-2010-26). --------------------------------------------------------------------------- The Exchange notes that the trading rules of Bats BZX Exchange, Inc., Bats BYX Exchange, Inc., Bats EDGX Exchange, Inc., and Bats EDGA Exchange, Inc. also provide that the CEO of the relevant exchange may halt, suspend trading in any and all securities traded on the exchange, close some or all exchange facilities, and determine the duration of any such halt, suspension, or closing, when he deems such action necessary for the maintenance of fair and orderly markets, the protection of investors, or otherwise in the public interest. The lists of special circumstances set out in such trading rules are substantially similar to those in Rule 51--Equities and NYSE Rule 51.\10\ --------------------------------------------------------------------------- \10\ See Bats BZX Exchange, Inc. Rule 11.1(c); Bats BYX Exchange, Inc. Rule 11.1(c); Bats EDGX Exchange, Inc. Rule 11.1(c); and Bats EDGA Exchange, Inc. Rule 11.1(c). --------------------------------------------------------------------------- 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,\11\ in general, and furthers the objectives of Section 6(b)(5) of the Act,\12\ in particular, because it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to, and perfect the mechanisms of, a free and open market and a national market system and, in general, to protect investors and the public interest and because it is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. The Exchange also believes that the proposed rule change is consistent with Section 6(b)(1) of the Act,\13\ in that it enables the Exchange to be so organized as to have the capacity to be able to carry out the purposes of the Act and to comply, and to enforce compliance by its exchange members and persons associated with its exchange members, with the provisions of the Act, the rules and regulations thereunder, and the rules of the Exchange. --------------------------------------------------------------------------- \11\ 15 U.S.C. 78f(b). \12\ 15 U.S.C. 78f(b)(5). \13\ 15 U.S.C. 78f(b)(1). --------------------------------------------------------------------------- The Exchange believes that the proposed rule change would remove impediments to, and perfect the mechanisms of, a free and open market and a national market system and, in general, protect investors and the public interest, and enable the Exchange to be so organized as to have the capacity to be able to carry out the purposes of the Act, because it would make Rule 901NY more reflective of the organizational structure of the Exchange. In this manner, it would strengthen the ability of the Exchange to respond appropriately and in a timely fashion to [[Page 86043]] extraordinary circumstances, even if the Board of Directors is unable to convene. However, unlike present Rule 901NY, which puts no limits on when the Board's designees may act, the proposed amended Rule 901NY would ensure that the CEO or his or her designee would be able to take action only when he or she deems such action to be necessary or appropriate for the maintenance of a fair and orderly market, or the protection of investors or otherwise in the public interest, due to extraordinary circumstances. In addition, the Exchange believes that the proposed rule change would remove impediments to, and perfect the mechanisms of, a free and open market and a national market system and, in general, protect investors and the public interest, and enable the Exchange to be so organized as to have the capacity to be able to carry out the purposes of the Act, because they would ensure that the Board of Directors continues to have the authority to take action it deems necessary or appropriate in particular situations. In addition, as proposed, the amended rule would ensure that the Board of Directors would remain informed, by requiring the CEO to notify the relevant Board of actions taken pursuant to the authority granted under the rule, with the exception of a period of mourning or recognition for a person or event, as soon thereafter as is feasible. For these reasons, the Exchange believes that the proposal is consistent with the Act. B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Exchange Act. The proposed rule change is not intended to address competitive issues but rather is concerned solely with the administration and functioning of the Exchange. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the proposed rule change does not (i) significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to Section 19(b)(3)(A) of the Act \14\ and Rule 19b-4(f)(6) thereunder.\15\ --------------------------------------------------------------------------- \14\ 15 U.S.C. 78s(b)(3)(A). \15\ 17 CFR 240.19b-4(f)(6). As required under Rule 19b- 4(f)(6)(iii), the Exchange provided the Commission with written notice of its intent to file the proposed rule change, along with a brief description and the text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, or such shorter time as designated by the Commission. --------------------------------------------------------------------------- A proposed rule change filed pursuant to Rule 19b-4(f)(6) under the Act \16\ normally does not become operative for 30 days after the date of its filing. However, Rule 19b-4(f)(6)(iii) \17\ permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The Exchange has asked the Commission to waive the 30-day operative delay so that the proposal may become operative immediately upon filing. The Exchange states that waiver of the operative delay would immediately strengthen the ability of the Exchange to respond appropriately and in a timely fashion to extraordinary circumstances. The Exchange further states that waiving the 30-day operative delay would not affect the authority of the Board of Directors to take action it deems necessary or appropriate in particular situations. Moreover, the Exchange states that waiver of the 30-day operative delay would allow the Exchange to align its Rule 901NY and its Rule 51(a)--Equities without delay. The Commission believes that the waiver of the operative delay is consistent with the protection of investors and the public interest. Therefore, the Commission hereby waives the operative delay and designates the proposal operative upon filing.\18\ --------------------------------------------------------------------------- \16\ 17 CFR 240.19b-4(f)(6). \17\ 17 CFR 240.19b-4(f)(6)(iii). \18\ For purposes only of waiving the 30-day operative delay, the Commission has also considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). --------------------------------------------------------------------------- At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule change should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic Comments Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to rule-comments@sec.gov. Please include File Number SR-NYSEMKT-2016-106 on the subject line. Paper Comments Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-NYSEMKT-2016-106. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-NYSEMKT-2016-106, and should be submitted on or before December 20, 2016. [[Page 86044]] For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\19\ --------------------------------------------------------------------------- \19\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2016-28633 Filed 11-28-16; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 81, No. 229 / Tuesday, November 29, 2016 / Notices 86041
with respect to the proposed rule comments on the proposed rule change determined by the Board or its designee,
change that are filed with the from interested persons. hours during which transactions in
Commission, and all written options on individual securities may be
I. Self-Regulatory Organization’s
communications relating to the made on the Exchange shall correspond
Statement of the Terms of Substance of
proposed rule change between the to the normal hours for business set
the Proposed Rule Change
Commission and any person, other than forth in the rules of the primary
those that may be withheld from the The Exchange proposes to amend exchange listing the securities
public in accordance with the NYSE MKT Rule 901NY to permit the underlying the options.
provisions of 5 U.S.C. 552, will be Chief Executive Officer of the Exchange The Exchange proposes to amend the
available for Web site viewing and or his or her designee to take certain first paragraph of Rule 901NY to
printing in the Commission’s Public actions in connection with the trading provide that, except as may be
Reference Room, 100 F Street NE., of securities on the NYSE Amex Options otherwise determined by the Board as to
Washington, DC 20549 on official marketplace. The proposed rule change particular days, the Exchange shall be
business days between the hours of is available on the Exchange’s Web site open for the transaction of business on
10:00 a.m. and 3:00 p.m. Copies of such at www.nyse.com, at the principal office every business day. The Exchange
filing also will be available for of the Exchange, and at the proposes to remove the current
inspection and copying at the principal Commission’s Public Reference Room. exclusion of Saturdays and Sundays
office of the Exchange. All comments II. Self-Regulatory Organization’s because Saturdays and Sundays are not
received will be posted without change; Statement of the Purpose of, and business days and therefore no
the Commission does not edit personal Statutory Basis for, the Proposed Rule exclusion is needed. Finally, the
identifying information from Change amended paragraph would provide that
submissions. You should submit only the hours at which trading sessions
information that you wish to make In its filing with the Commission, the shall open and close may be specified
available publicly. All submissions self-regulatory organization included by Exchange rule, as well as by the
should refer to File No. SR–NYSEArca– statements concerning the purpose of, Board. The two paragraphs of the
2016–89, and should be submitted by and basis for, the proposed rule change present rule would become paragraphs
December 20, 2016. Rebuttal comments and discussed any comments it received (a) and (b). These proposed rule changes
should be submitted by January 3, 2017. on the proposed rule change. The text are based in part Exchange Rule 51(a)—
of those statements may be examined at Equities as well as on New York Stock
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
the places specified in Item IV below. Exchange LLC (‘‘NYSE LLC’’) Rule
authority.93 The Exchange has prepared summaries, 51(a).4
set forth in sections A, B, and C below,
Robert W. Errett, The Exchange proposes to add new
of the most significant parts of such
Deputy Secretary.
statements. paragraphs (c), (d), and (e) to Rule
[FR Doc. 2016–28638 Filed 11–28–16; 8:45 am] 901NY. These proposed changes are
BILLING CODE 8011–01–P A. Self-Regulatory Organization’s based on Rule 51(b)–(d)—Equities and
Statement of the Purpose of, and the NYSE Rule 51(b) and (c). New
Statutory Basis for, the Proposed Rule paragraph (c) would provide that,
SECURITIES AND EXCHANGE Change except as may be otherwise determined
COMMISSION 1. Purpose by the Board of Directors, the CEO of the
Exchange or his or her designee may
The Exchange proposes to amend halt or suspend trading in some or all
[Release No. 34–79374; File No. SR–
NYSEMKT–2016–106] NYSE Amex Options Rule 901NY securities traded on the Exchange;
(Trading Sessions) to permit the Chief extend the hours for the transaction of
Self-Regulatory Organizations; NYSE Executive Officer (‘‘CEO’’) of the business on the Exchange; close some or
MKT LLC; Notice of Filing and Exchange or his or her designee to take all Exchange facilities; determine the
Immediate Effectiveness of Proposed certain actions in connection with the duration of any such halt, suspension or
Rule Change Amending NYSE MKT trading of securities on the Exchange. closing undertaken; or determine to
Rule 901NY The Exchange believes the proposed trade securities on the Exchange’s
rule change would make Rule 901NY disaster recovery facility.5
November 22, 2016. more reflective of the organizational
Pursuant to Section 19(b)(1) 1 of the structure of the Exchange. At the same 4 See Securities Exchange Act Release No. 58705
Securities Exchange Act of 1934 (the time, the proposed rule changes would (October 1, 2008), 73 FR 58995 (October 8, 2008)
ensure that the Board of Directors of the (SR–Amex–2008–63). NYSE LLC is an affiliate of
‘‘Act’’),2 and Rule 19b–4 thereunder,3 the Exchange. See Securities Exchange Act Release
notice is hereby given that on November Exchange continues to have the No. 45433 (February 12, 2002), 67 FR 7441
10, 2016, NYSE MKT LLC (the authority to take action it deems (February 19, 2002) (SR–NYSE–2001–55). The
‘‘Exchange’’ or ‘‘NYSE MKT’’) filed with necessary or appropriate in particular Exchange notes that its affiliate NYSE Arca, Inc. is
situations. submitting substantially the same proposed rule
the Securities and Exchange change for NYSE Arca Rule 7.1 and NYSE Arca
Commission (the ‘‘Commission’’) the The first paragraph of Rule 901NY Equities Rule 7.1. See SR–NYSEArca–2016–148.
proposed rule change as described in provides that, unless otherwise ruled by 5 As part of its business continuity and disaster
the Board of the Exchange or its
asabaliauskas on DSK3SPTVN1PROD with NOTICES
Items I and II below, which Items have recovery plans, the Exchange maintains a disaster
designee, the Exchange shall be open for recovery facility, which is a secondary data center
been prepared by the self-regulatory located in a geographically diverse location, as
organization. The Commission is the transaction of business daily except required by Regulation SCI. See 14 CFR
publishing this notice to solicit on Saturdays and Sundays, and that the 242.1001(a)(2)(v) (requiring policies and procedures
hours at which trading sessions shall for business continutity [sic] and disaster recovery
93 17 open and close shall be established by plans that include maintaining backup and recovery
CFR 200.30–3(a)(57). capabilities sufficiently resilient and geographically
1 15 U.S.C. 78s(b)(1). the Board or its designee. Commentary diverse and that are reasonably designed to achieve
2 15 U.S.C. 78a. .01 to Rule 901NY notes that, except next business day resumption of trading and two-
3 17 CFR 240.19b–4. under unusual conditions as may be Continued
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![86044 Federal Register / Vol. 81, No. 229 / Tuesday, November 29, 2016 / Notices
For the Commission, by the Division of Commission designated a longer period Municipal Series Dec 2024 Index (the
Trading and Markets, pursuant to delegated within which to approve the proposed ‘‘2024 Index’’ and, together with the
authority.19 rule change, disapprove the proposed 2023 Index, the ‘‘Indices’’), respectively.
Robert W. Errett, rule change, or institute proceedings to The Exchange submitted the proposed
Deputy Secretary. determine whether to disapprove the rule change because the Shares of the
[FR Doc. 2016–28633 Filed 11–28–16; 8:45 am] proposed rule change.5 No comments Funds meet all of the ‘‘generic’’ listing
BILLING CODE 8011–01–P have been received regarding the requirements of BZX Rule 14.11(c)(4)
proposed rule change. On October 26, applicable to the listing of index fund
2016, the Exchange filed Amendment shares based on fixed income securities
SECURITIES AND EXCHANGE No. 2 to the proposed rule change.6 This indexes except for those set forth in
COMMISSION order approves the proposed rule BZX Rule 14.11(c)(4)(B)(i)(b).
[Release No. 34–79381; File No. SR– change, as modified by Amendments Specifically, for the iShares iBonds Dec
BatsBZX–2016–48] No. 1 and No. 2, on an accelerated basis. 2023 Term Muni Bond ETF,
I. The Exchange’s Description of its components that comprised only 5.83%
Self-Regulatory Organizations; Bats of the weight of the 2023 Index have a
BZX Exchange, Inc.; Order Granting Proposal 7
minimum original principal amount
Accelerated Approval of a Proposed The Exchange proposes to list and outstanding of $100 million or more.
Rule Change, as Modified by trade shares (the ‘‘Shares’’) of the Funds Further, for iShares iBonds Dec 2024
Amendments No. 1 and No. 2 Thereto, under BZX Rule 14.11(c)(4), which Term Muni Bond ETF, only 5.72% of
To List and Trade Shares of the governs the listing and trading of Index
the weight of the 2024 Index have a
iShares iBonds Dec 2023 Term Muni Fund Shares based on fixed income
minimum original principal amount
Bond ETF and iShares iBonds Dec securities indexes. The Shares will be
outstanding of $100 million or more. In
2024 Term Muni Bond ETF of the offered by the Trust, which is a
contrast, BZX Rule 14.11(c)(4)(B)(i)(b)
iShares U.S. ETF Trust Pursuant to Delaware statutory trust and is
provides that components that in the
BZX Rule 14.11(c)(4) registered with the Commission, as an
aggregate account for at least 75% of the
open-end investment company.8
November 22, 2016. BlackRock Fund Advisors is the weight of the index or portfolio each
On August 9, 2016, Bats BZX investment adviser (‘‘BFA’’ or shall have a minimum original principal
Exchange, Inc. (the ‘‘Exchange’’ or ‘‘Adviser’’) to the Funds.9 State Street amount outstanding of $100 million or
‘‘BZX’’) filed with the Securities and Bank and Trust Company is the more.
Exchange Commission (‘‘Commission’’) administrator, custodian, and transfer
pursuant to Section 19(b)(1) of the A. iShares iBonds Dec 2023 Term Muni
agent for the Trust. BlackRock Bond ETF
Securities Exchange Act of 1934 Investments, LLC serves as the
(‘‘Exchange Act’’) 1 and Rule 19b–4 distributor for the Trust. 1. The ‘‘2023 Index’’
thereunder,2 a proposed rule change to The Funds seek to replicate as closely
list and trade shares of the iShares as possible, before fees and expenses, The 2023 Index measures the
iBonds Dec 2023 Term Muni Bond ETF the price and yield performance of the performance of the non-callable
and iShares iBonds Dec 2024 Term S&P AMT-Free Municipal Series Dec investment-grade, tax-exempt U.S.
Muni Bond ETF (each a ‘‘Fund,’’ and 2023 Index (the ‘‘2023 Index’’) and municipal bonds with specific annual
together the ‘‘Funds’’) pursuant to BZX maturities (‘‘Municipal Securities’’). As
Rule 14.11(c)(4). Notice of the proposed 5 To allow sufficient time to consider the of July 18, 2016, there were 4,612 issues
rule change was published in the proposed rule change, the Commission designated in the 2023 Index. 73.56% of the weight
Federal Register on August 30, 2016.3 November 28, 2016, as the date by which the of the 2023 Index components was
On October 6, 2016, the Exchange filed Commission shall either approve or disapprove, or comprised of individual maturities that
institute proceedings to determine whether to
Amendment No. 1 to the proposed rule disapprove, the proposed rule change. See were part of an entire municipal bond
change, which replaced and superseded Securities Exchange Act Release No. 79092, 81 FR offering with a minimum original
the proposed rule change as originally 72141 (Oct. 19, 2016). principal amount outstanding of $100
filed.4 On October 13, 2016, the 6 In Amendment No. 2, the Exchange clarified
million or more for all maturities of the
that representations regarding adherence to the
continued listing requirements and conditions offering. In addition, the total face
19 17 CFR 200.30–3(a)(12).
1 15
under which the Exchange would delist the Shares amount outstanding of issues in the
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
apply to both Funds. The amendment to the 2023 Index was approximately $38.5
proposed rule change is available at: https:// billion, the market value was $46.4
3 See Securities Exchange Act Release No. 78666
www.sec.gov/comments/sr-batsbzx-2016-48/
(Aug. 24, 2016), 81 FR 59700 (‘‘Notice’’). batsbzx201648.shtml. billion, and the average dollar amount
4 In Amendment No. 1, the Exchange: (1) Clarified 7 Additional information regarding the Fund, the outstanding of issues in the 2023 Index
that each Fund’s policy to invest at least 80% of its Shares, and the Trust (as defined herein) can be was approximately $8.3 million.
net assets in components of its underlying index is found in the Notice, Amendments No. 1 and 2, and
a continued listing requirement; (2) represented that Further, the most heavily weighted
the Registration Statement, as applicable. See
at least 90% of the Funds’ net assets that are Notice, supra note 3, and Registration Statement, component represented 1.61% of the
invested in listed derivatives will be invested in infra note 8. weight of the 2023 Index, and the five
instruments that trade in markets that are members
or affiliates of members of the Intermarket
8 The Trust has filed a registration statement on most heavily weighted components
Surveillance Group (‘‘ISG’’) or are parties to a behalf of the Funds on Form N–1A (‘‘Registration represented 3.66% of the weight of the
Statement’’) with the Commission. See Registration
asabaliauskas on DSK3SPTVN1PROD with NOTICES
comprehensive surveillance sharing agreement with
Statement on Form N–1A for the Trust, dated
2023 Index.10 48% of the 2023 Index
the Exchange; (3) provided additional detail
regarding the short-term instruments that the Funds October 29, 2015 (File Nos. 333–123257 and 811–
may hold; (4) stated that price information for 10325). The Commission has issued an order 10 BZX Rule 14.11(c)(4)(B)(i)(d) provides that no
exchange-listed options held by the Funds will be granting certain exemptive relief to the Trust under component fixed-income security (excluding
available from the Options Price Reporting the Investment Company Act of 1940 (15 U.S.C. Treasury Securities, as defined therein) shall
Authority; and (5) made various other technical 80a–1) (‘‘1940 Act’’). See Investment Company Act represent more than 30% of the weight of the index
changes. The amendment to the proposed rule Release No. 28021 (Oct. 24, 2007) (File No. 812– or portfolio, and the five most heavily weighted
change is available at: https://www.sec.gov/ 13426). component fixed-income securities in the index or
comments/sr-batsbzx-2016-48/ 9 BFA is an indirect wholly owned subsidiary of portfolio shall not in the aggregate account for more
batsbzx201648.shtml. BlackRock, Inc. than 65% of the weight of the index or portfolio.
VerDate Sep<11>2014 17:48 Nov 28, 2016 Jkt 241001 PO 00000 Frm 00125 Fmt 4703 Sfmt 4703 E:\FR\FM\29NON1.SGM 29NON1](https://thefederalregister.org/doc/81_FR_86270/page/4.svg)
Document Created: 2016-11-29 00:33:11
Document Modified: 2016-11-29 00:33:11
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 81 FR 86041 |
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